ArthVeda Capital Introduces Smart Alpha™ Indexes

New index series mitigates risk while using market inefficiencies to
enhance performance

December 15, 2015 09:00 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--ArthVeda Capital, a top-ranked global asset management firm, announced
today the launch of its Smart Alpha™ Framework and its initial suite of
eight Indexes. Smart Alpha™ is a rules-based, value investing framework
that produces a portfolio of low risk, high quality stocks that are
available at a discount to intrinsic value.

The Smart Alpha family is composed of Smart Alpha™, Smart Value™ and
Smart Income™ Indexes. Each index component is weighted by its discount
to intrinsic value, as compared to the float-adjusted market-cap
weightings of conventional indexes. ArthVeda Capital is working with the
New York Stock Exchange (NYSE), which is providing calculation and
dissemination services for its indices in the U.S.

“The major disadvantage of conventional indexes is that, because they
are market-cap weighted, they tend to over-allocate to overvalued stocks
and under-allocate to undervalued stocks,” said Dr. Vikas Gupta,
Executive Vice President and Chief Investment Officer at ArthVeda
Capital and the inventor and architect of the Smart Alpha™ concept.
“Smart Alpha does the reverse, which tends to produce better performance
over the longer term.”

ArthVeda Capital plans to launch options on each of the Smart Alpha™
indexes on the NYSE later this month. In addition, the company is in
discussion with several major ETP providers and expects to create
investable products in early-2016.

Smart Alpha Indexes consist of stocks that have stable business models,
strong balance sheets, a value-creating capital allocation track record
and are available at a discount to intrinsic value. They are weighted by
each component’s discount to intrinsic value as determined by ArthVeda’s
proprietary model.

Smart Income Indexes consist of the top 50 dividend-paying companies
from their respective Smart Alpha pools, equally weighted.

Finally, Smart Value Indexes primarily consist of the same stocks which
are represented in various major market indexes, weighted based on each
component’s discount to intrinsic value as determined by ArthVeda.

The indexes being launched today include:

Smart Alpha Indexes

AUTXA

ArthVeda Smart Alpha™ US Total-cap 50

Smart Value Indexes

AULVV

ArthVeda Smart Value™ US Large-cap 500

ABLVV

Arthveda Smart Value™ UK Large-cap 100

AKLVV

ArthVeda Smart Value™ Europe Ex-UK Large-Cap

AJLVV

ArthVeda Smart Value™ Japan Large-Cap

Smart Income Indexes

AUTDI

ArthVeda Smart Income™ US Total-cap 50 Divine Dividend

AXLDI

ArthVeda Smart Income™ International Large-cap 50 Divine Dividend

AGLDI

ArthVeda Smart Income™ Global Large-cap 50 Divine Dividend

“We should be clear that these are not smart beta products,” said
ArthVeda Director & Chief Executive Officer Bikram Sen. “Rather than
adjusting for exogenous factors that may affect business in the short
term, we focus entirely on identifying undervalued high quality
companies using our patent-pending Smart Alpha™ framework, which differs
considerably from low price multiple approaches that are typically
associated with value investing.”

Smart Beta indexes often look at external factors such as interest
rates, exchange rates, or price-related factors such as momentum,
price-to-book and volatility rather than the internal fundamental ratios
reflecting the company’s business model and the market price relative to
its intrinsic value. While Smart Beta indexes deliver the promised tilt
to a portfolio, what is not known is whether, in the future, the factor
tilt will deliver the returns it has in the past as more investors
embrace the strategies.

“The U.S. launch of our global family of Smart Alpha Indexes™ represents
an important new initiative for ArthVeda Capital,” said ArthVeda
Chairman & Managing Director Kapil Wadhawan. “As a leading innovator in
global asset management, we are looking forward to making our
proprietary methodology available to investors in U.S. and International
equities through partnerships with leading US-based ETF issuers and
asset managers.”

About ArthVeda Capital

ArthVeda Capital is the equities vertical of global asset management
firm ArthVeda
Fund Management Pvt. Ltd. Established to create rules-based
investment solutions grounded in the principles of value investing,
ArthVeda Capital applies its proprietary Smart Alpha™ framework to a
family of products. The Smart Alpha™ index universe includes all
market-caps in both US and international markets. The objective of
ArthVeda Capital is to generate forward-thinking investment strategies
previously inaccessible through cap-weighted indexes. For more
information, please visit www.arthvedacapital.com.

ArthVeda Capital is a Strategic Business Unit of ArthVeda Fund
Management Pvt. Ltd. (AVFM). It is not possible to invest directly in an
index. AVFM Indices do not sponsor, endorse, sell, or promote any
investment fund or other investment vehicle that is offered by third
parties and that seeks to provide an investment return based on the
performance of any index.This document does not constitute an
offer of services in jurisdictions where AVFM Indices does not have the
necessary licenses. AVFM Indices receives compensation in connection
with licensing its indices to third parties.